Judge OKs Corporate Donations to Federal Candidates

A federal judge ruled Thursday that corporations should be allowed to give donations directly to candidates for Congress and the White House, a decision that runs counter to campaign finance rules that have been in place for more than a century.

U.S. District Judge James C. Cacheris ruled in United States v. William Danielczyk Jr. & Eugene Biagi that the defendants did not break laws by using corporate funds to reimburse donations made by employees.

Their case involved “an alleged scheme of recruiting donors and reimbursing their contributions to Hillary Rodham Clinton’s 2006 and 2008 Senate and presidential campaigns,” according to federal court documents. In their defense, Danielczyk and Biagi cited the Supreme Court’s decision in Citizens United v. the Federal Election Commission, the landmark 2010 case that allowed corporations and unions to use corporate funds to donate to organizations running advertisements to affect federal campaigns.

Currently, the ruling applies only within the boundaries of the U.S. District Court for the Eastern District of Virginia, where approximately seven House Congressional districts are drawn. But if higher courts approve the decision, the implications could be huge for future elections because it would reverse a nationwide ban on corporate donations to federal candidates, which has stood since the Tillman Act passed in 1907. The ruling would also appear to go far beyond the Citizens United case by allowing corporate donations directly to campaigns, not just to organizations active in politics.

Campaign finance experts say this case will likely be appealed to the Circuit Court of Appeals and could potentially end up before the Supreme Court. Peter Carr, a spokesperson for the U.S. Attorney’s Office, said Friday it was too soon after the decision to say whether the government will appeal the case.

“We are working this case in conjunction with the Public Integrity Section of the Department of Justice and we are reviewing the opinion,” Carr said.

According to Fred Wertheimer, president of Democracy 21, Thursday’s decision “makes no sense” because it reverses a Supreme Court ruling in the FEC v. Beaumont case that upheld the long-standing ban on corporate donations to federal candidates.

“Last time I checked, a federal district court does not have the power to overrule Supreme Court decisions,” he said. “The ban on corporate contributions is constitutional according to current Supreme Court doctrine and ultimately the Supreme Court would have to overrule a decision issued by the court in 2003 in order to uphold this decision.”